Yesterday #snowflake IPO ~ $120. Closing share price ~ $250
Closing Mcap~ $70 bn
P/E: N/A
ttm P/S on close ~ 175x
By all reads / hears: Snowflake is a great biz & not a fly by night operator
So was Red Hat that did a IPO in 1999 : a short thread👇
Closing Mcap~ $70 bn
P/E: N/A
ttm P/S on close ~ 175x
By all reads / hears: Snowflake is a great biz & not a fly by night operator
So was Red Hat that did a IPO in 1999 : a short thread👇
In Aug '99 #RedHat went public. IPO~ $14. IPO day close~ $52.
Outstanding shares end August ~ 66.6 mn. ttm revenue ~ $13 mn. Loss making
So on IPO day close:
Mcap $3.5 bn
P/E: N/A
ttm P/S ~ 270x
Outstanding shares end August ~ 66.6 mn. ttm revenue ~ $13 mn. Loss making
So on IPO day close:
Mcap $3.5 bn
P/E: N/A
ttm P/S ~ 270x
By Nov/Dec the shares had touched ~ $140. Mcap > $10 bn
Due to exercise of ESOPS & conversion of preferred shares to common stock the total outstanding shares jumped to 153 mn by end Feb 2000
28 Feb 1999 shares were trading down at ~ $44. Mcap ~ $6.7 bn
Due to exercise of ESOPS & conversion of preferred shares to common stock the total outstanding shares jumped to 153 mn by end Feb 2000
28 Feb 1999 shares were trading down at ~ $44. Mcap ~ $6.7 bn
Red Hat wasn't one of the many crappy companies that did an IPO in 1999. en.wikipedia.org/wiki/Red_Hat
from 1999 to 2108 its revenues went up ~ 275x a cagr of ~ 32%
it turned profit making & ended 2018 with almost $400mn profit
It was acquired by IBM in end 2018 for$34 bn
from 1999 to 2108 its revenues went up ~ 275x a cagr of ~ 32%
it turned profit making & ended 2018 with almost $400mn profit
It was acquired by IBM in end 2018 for$34 bn
While company's biz grew at an amazing pace over years, the experience of shareholders was vastly different. Worst off were those who bought during 1st few months frenzy & held on - egged on by 'experts' confirming a 'new normal' :)
These folk took 12-18 yrs to break even !!
These folk took 12-18 yrs to break even !!
IPO boom of 1999 & subsequent bust was real. I See parallels in 2020. Many gr8 businesses r IPOing in US. eg #Snowflake. But frenzy causing absurd valuations. Fortunes may b made in short term. But if u don't get out in time & fall 4 'new normal' narratives - u will b minced meat
Some will give eg of Amazon: which even if bought at peak of '99 & held on, would've been a multi bagger
But remember: even Amazon crashed like mad in dot com bust
Patiently wait out a better price 2 buy gr8 cos that r currently at absurd valuations due to frenzy
That's it :)
But remember: even Amazon crashed like mad in dot com bust
Patiently wait out a better price 2 buy gr8 cos that r currently at absurd valuations due to frenzy
That's it :)
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